Compute net present value of both projects and shot invest

Reference no: EM13153644

Big Shot Market is considering two investment projects:
Project A Project B
Initial Cost 250,000 200,000
Number of Periods 5 5
Yearly Net Cash Flow 75,000 60,000
Cost of Capital (WACC) 5% 5%

a) Compute net present value of both projects
b) Should Big Shot invest?
c) Which project should they choose?

Reference no: EM13153644

Questions Cloud

Health of your own community : four organizations that contribute to the health of your own community. For each, consider how you might participate in any of their activities-how you could make a difference personally

Floor plan of a building you are familiar : Using the floor plan of a building you are familiar with, design an electronic monitoring plan that includes closed-circuit television, burglar alarms with appropriate sensors, fire detectors, and fire suppression and physical access controls for key..

Compute the standard deviation and coefficient of variation : Nile Riverboat co. Nile Riverboat company a major boat building company highly sensitive to the economy, expects profits next year to be $2,000,000 if the economy is strong, $1,2000,000 if the economy is steady and minus $400,000 if the economy is we..

Trucking company offers a better deal : Trucking company A says it will only charge 70 cents per ton per mile per widget to load on to a truck that holds 57,000 pounds. (Remember, it takes a lot of labor to load each truck!). What is the total cost of moving the current order of 20,250 wid..

Compute net present value of both projects and shot invest : a) Compute net present value of both projects b) Should Big Shot invest? c) Which project should they choose?

Mark m. upp has just been fired : Mark M. Upp has just been fired as the university book store manager for setting prices too low (only 20 percent above suggested retail). He is considering opening a competing bookstore near the campus, and he has begun an analysis of the situation. ..

Epidemic of methamphetamine dependence : The epidemic of methamphetamine dependence is spreading eastward across the United States. Unlike the gender ratio associated with most other drugs of abuse, the proportion of woman methamphetamine users is nearly equal to men.

High-level causal-loop diagram : Develop a high-level causal-loop diagram (with main stock-flow chains for the wildshrimp catch and aquaculture production activities) depicting the key variables and feedback (balancing and reinforcing) loops that most likely are creating the system ..

Include depreciation and working capital : include depreciation and working capital in the following NPV analysis, because depreciation for the machinery goes for longer than the project timeline, and working capital needs to be accounted for as a percentage of sales.

User Account

All Pages